News:

“Treat the earth well: it was not given to you by your parents, it was loaned to you by your children. We do not inherit the Earth from our Ancestors; we borrow it from our Children.”Ancient American Indian Proverb Civilitas successit barbarum Ubi Jus - Ibi Remedium ----> Equity sees that as done what ought to be done Equity will not suffer a wrong to be without a remedy - Equity delights in equality - One who seeks equity must do equity - Equity aids the vigilant, not those who slumber on their rights - Equity imputes an intent to fulfill an obligation - Equity acts in personam - Equity abhors a forfeiture - Equity does not require an idle gesture - He who comes into equity must come with clean hands - Equity delights to do justice and not by halves -Equity will not complete an imperfect gift - Equity will not allow a statute to be used as a cloak for fraud

What becomes to the options of the Fed to respond to a similar crash, the things are rather different now. In 1987, the Fed quickly dropped its fund rate to 7 percent from 7.5 and injected reserves to markets. Now, a 50 -basis point cut in the federal fund rate would take the rate back to the range 0.5 – 0.75, which would likely have a very limited effect of the short-term rates. The Fed has also been pumping massive amounts of liquidity in the markets through its QE program. While re-starting the program would surely provide some temporary relief, there is no certainty that it would be enough to stem the panic; moreover so, because the program trading has a much bigger role now than in 1987.

In the 1980s, the main innovation in the program trading was the portfolio insurance, where the computer models were used to optimize the stock-to-cash ratios at various market prices. Most of the portfolio insurers used the futures market, which was likely to increase the downward pressure of the stock prices during the fall. Currently, the automatic trading is much more widespread. It is estimated that around a half of all trading in the US stock markets is executed by algorithms.

Also, it is estimated that ETFs, the risk parity funds and the volatility target funds hold some $8 trillion of the so called passive private assets. They have contributed to the uninterrupted upward trend in the equity markets, but their behavior in a large market correction is untested. When a deep enough correction is reached, the algos are likely to start to sell and short the market and the ETFs and other funds will start to lose value en masse. This will turn their passive assets very active to the sell side. When this point is reached, selling in the markets is likely to morph into a rapid crash halted only by the circuit breakers.

To make things more alarming, the global economic situation resembles more the time before the Great Depression than before the crash of 1987. This makes it possible that, if a stock market crash occurs, it will start a path towards a global depression🌠. Thus, after nearly a decade of central bank induced market manipulation, we may finally be closing to the point where the Abyss starts to gaze back at us.

Monday's sell-off surpasses a 777.68 points drop on the Dow Jones on 29 September 2008 when Congress rebuffed a $700bn bank bailout plan following the collapse of US investment bank Lehman Brothers earlier that month.

The decline in the Dow was closely followed by the wider S&P 500 stock index, down 2.93% and the technology-heavy Nasdaq, down 3.2%.

London's main share index, the FTSE 100, closed down 1.46% while earlier, the biggest markets in Asia fell between 1% and 2.5%.

The decline followed months of market increases, which had fuelled concerns that share prices were over valued.

The Dow's dramatic fall marks a turnaround from January, when it raced past the 25,000 and 26,000 point milestones in less than a month.

David Madden, market analyst at CMC Markets, said: "Equity traders were enjoying a bullish run recently, and the jolt from the major decline in the US last Friday has triggered a worldwide round of profit taking."

US shares suffer sharpest drop since 2016

The Dow Jones rose more than 25% in 2017 - a year which was also unusual for its lack of sharp moves.

"There is going to be more volatility this year, " Andrew Wilson chief executive of Goldman Sachs Asset Management, told the BBC.

"We are in a cycle where central banks are reducing the amount of bonds they are buying and some central banks putting up interest rates," he said.

Strong wage gains reported on Friday provided a catalyst for the most recent losses, as investors saw it as a sign that inflation and interest rates might move faster than previously anticipated.

On Friday there was a hefty 4% loss for shares in Apple, which had been one of the markets' star performers in recent years.

I already took 100% of my 2017 gains off the table and what I'm holding amounts to house money. I'll take my chances.

I am having a seriously shi tty week in pot stocks, but I think they'll recover. I am in damage control mode already.

You are certainly entitled to your opinion about a possible market crash, but I only expect minor corrections, at least for a couple more years.

I was just pointing out that a 900 point drop from these levels is not the same as the 900 point crash of 1987 when that represented a 30% drop instead of a 3 % drop.

It sounds bad, but it just isn't, so far. It's just that everyone has come to think the market indices only go up.

Nothing personal, and I appreciate your concern. My stock market exposure is a tiny portion of my net worth, so I'll be okay.

Yes Eddie, a hiccup so far, but one with the potential to be a serious affair if it isn't arrested very soon.

While the hyperbole from the dim about the supposed massive stock market crash will no doubt drown out the more financially astute voices today, may I point your attention to the real crash, the bond market.

There are things happening there over the prior few months that make me shudder, today's action as well.

You wisely pointed out that it is all about percentages, not the points that the Dim are always occupied with. The rapidity of the recent move in yields from their near zero markings a while back are horrifying.

May I call your attention to the two year US Treasury now yielding well above 2%, that's now more than the yield on the S&P 500 and about a 100 % increase since October.

It's just Powell trying to engineer a controlled sell-off. When they're satisfied with the amount of wailing and gnashing of teeth, the usual suspects will show up and buy with both fists. Belgium, maybe, or another one of their other default fake bond buyers.

In regard to the posts by those who chose to disregard and/or disdain my recent financial advice:

As to the "market geniuses" at the Doomstead Diner and their incorrigibly erroneous confidence in their "astute" financial abilities along with their incorribly erroneous views of my TIMELY warning to get OUT of the market completely, good luck with that. Your Trumpian assumption that a person's pecuniary net worth equates to their level of financial acumen (i.e. intelligence, wisdom, money is IT, etc. you get the idea) is the basic flaw you labor under. This flaw is the direct result of the love of money.

Unlike you, I do not love money. Therefore, I can be far more objective about stock and bond markets than you. You can lead a horse to water, but you can't make it drink; you can lead people to logic, but you can't make them think.

Real Christians understand Christ's teachings in this issue of money. False Christians and atheists are incapable of understanding Christ's teachings in this, or any other issue of human behavior.

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Bible New International Version Luke 16:14-15

14 The Pharisees, who loved money, heard all this and were sneering at Jesus.

15 He said to them, "You are the ones who justify yourselves in the eyes of others, but God knows your hearts. What people value highly is detestable in God's sight.

Dr. Richard Wolff joins us today to talk about what happens if we don't stop pretending that our economy is working for anyone but the super rich, as we may be starting on the long road of endless recessions, depressions amid a long term downward spiral.

On February 8, 2018, US crude oil’s March 2018 futures fell 1% and closed at $61.15 per barrel. ETFs that replicate US crude oil futures’ returns like the United States Oil ETF (USO) and the ProShares Ultra Bloomberg Crude Oil ETF (UCO) fell 2.3% and 4.4% on the same day.

Agelbert NOTE: Published over a year ago, this article accurately predicted what Trump🦀 and his wrecking crew would do 🌪 to this country. But more importantly, it explains why 'greed is good' true believers 🦖 in general, and Capitalism🦀 in particular, doom human civilization to collapse.

Civilizations are living organisms striving to survive and develop through predictable stages of birth, growth, maturation, decline and death. An often overlooked factor in the success or failure of civilizations are cultural memes—the knowledge, beliefs, and behaviors passed down from generation to generation. Cultural memes are a much more significant driver of human evolution than genetic evolution. Entire civilizations have been weeded out when their belief system proved maladaptive to a changing environment. One such cultural meme holding sway over today’s governments, institutions, and society is our economic system of capitalism. The pillars of capitalism represent a belief system so ingrained in today’s culture that they form a sort of cargo cult amongst its adherents. Cargo cults are any of the various Melanesian religious groups which focused on obtaining material wealth(manufactured Western goods that came on cargo ships) through magical thinking, religious rituals and practices. Today the term “cargo cult” is used to describe a wide variety of phenomena that involve superficial imitation of a process or system in order to fabricate a successful outcome without even the basic understanding of its mechanism.

The tenets of capitalism are ritually followed in the proclaimed belief that “a rising tide lifts all boats”, i.e. so-called improvements in the general economy will benefit all participants in that economy. Centuries of unbridled capitalism have demonstrated beyond any doubt that it does not lift all boats. A new study finds that half of Americans are “shut off from economic growth”. The rules of the game are so stacked against the masses that this week a professor said “only all-out thermonuclear war might fundamentally reset the existing distribution of resources.” Capitalism’s imperative for expansion, growing profit levels, and efficiency has ultimately dehumanized our culture.

Not even when our basic life support systems are being torn asunder do the vast majority question the path we are on. We are all a captive audience to the system and those few dissident voices are snuffed out under the wheels of “progress”.

Truth be told, the corporate elite have long written off all those people living hand to mouth. Trump’s pick for Labor Secretary said, unlike workers, machines are “always polite, they always upsell, they never take a vacation, they never show up late, there’s never a slip-and-fall, or an age, sex, or race discrimination case.” Massive global unemployment resulting from the automation revolution has not yet been addressed by governments. Roughly half of all jobs in the U.S. are at risk of automation and two-thirds in the developing countries. This is all coming at a time when humans are fast destroying the ecosystems underpinning the very foundation upon which human civilization has developed over thousands of years. Mass migration of climate refugees will only further destabilize governments, stoke ethnic and cultural tensions, and give rise to fascist political movements. No conspiracy is needed to exterminate the “useless eaters”, just allow mother nature to take its course and climate change will be killing billions by mid century.

Those in military planning know this and periodically express their fear of what is coming, but business-as-usual rolls on.

Capitalism’s constant impetus to shift costs, risks, and burdens off industry and onto the environment and society carries on under the guise of “being more competitive”. It’s a way of externalizing costs to maximize profit and if these costs were truly taken into account, none of the world’s top industries would be profitable (Interestingly, the link to this study has been scrubbed from the internet).

It’s the height of magical thinking to put so much faith in some mystical “invisible hand of the free market” to solve existential threats such as an ever-widening wealth gap and the wholesale destruction of planetary life-support systems. There is no benevolent “invisible hand” turning individual self-interest into the common good. The primary mandate of capitalism is to protect and grow capital. The “invisible hand” is just a bunch of people 🦀 scrambling to make as much money as possible, not caring or oblivious to those they hurt in the process. F u c k the invisible hand of the market. The invisible hand of mother nature will punish those who squander Earth’s rich but finite resources.

It’s been clear for some time that we have past the point of no return, triggering multiple tipping points in Earth’s living systems. New findings are continually confirming scientists’ worst nightmares. A key glacier in the Antarctic that holds back 10 feet of sea level rise was just described as breaking apart from the inside out. In other grim news, the long feared carbon bomb has now been quantified and is projected to release the emissions equivalent of an industrial country like the U.S. in the next few decades, prompting researchers to say that “climate change may be considerably more rapid than we thought it was.” Biodiversity loss is another critical threshold we have breeched: “New research shows that local extinctions have already occurred in 47% of the 976 plant and animal species studied.” A new study also reveals that the planet’s tallest animal is facing extinction after its numbers have plummeted in recent years, with the ominous warning that “many species are slipping away before we can even describe them.” Forests are being wiped out by armies of invasive insects. Because of a rapidly changing climate and the vast scale of the problem, the idea that reforestation will somehow save us is a pipe dream. Those forests won’t stay healthy enough to serve as carbon sinks and besides, seven times Earth’s land area would need to be in cultivation in order to reduce the planet’s atmospheric CO2 level down to 350ppm.

Biodiversity hot spots of 80% of biosphere's species endangered by Global Warming Pollution

Note that the Permian Mass extinction is estimated to have happened anywhere over the course of 200,000 years to 15 million years. The current 6th mass extinction is happening orders of magnitude faster due to a multitude of factors including deforestation, habitat fragmentation, chemical pollution, poaching, etc., making this current disaster very unique in Earth’s history:

The team of geologists and biologists say that our current extinction crisis is unique in Earth’s history due to four characteristics: the spread of non-native species around the world; a single species (us) taking over a significant percentage of the world’s primary production; human actions increasingly directing evolution; and the rise of something called the technosphere. – Link

Perhaps the fate of humans was written in stone once we stood upright and developed tools. To a large degree, modern technology has been an expression of the energy-dense hydrocarbon fuels we discovered and are not willingly giving up anytime soon. Once fossil fuels ignited the Industrial Revolution and the Haber–Bosch process unleashed the human population bomb, nothing could stop the deadly carbon consumption feedback loop, not even decades of scientific warnings.

From a throwback to our primate ancestors, modern humans have been hard-wired to ignore threats that are not immediate or local; global ecological overshoot(of which climate is just one aspect) is imperceptible to the real-time cognitive processing of humans and represents the ultimate under-the-radar threat able to undermine our reasoning and response:

Psychological concepts of how we view the world around us, including ‘creeping normalcy’ or ‘landscape amnesia’, block day-to-day comprehension of what accelerating human activities represent—whether it is human population, the number of dammed rivers, forest destruction, or the impact of motor car emissions in a timespan that is geologically brief. Creeping normalcy refers to slow trends concealed in noisy fluctuations that people get used to without comment, while landscape amnesia describes forgetting how different the landscape looked 20–50 years ago (Diamond 2005: 425).

In his study of how societies fail, biogeographer Jared Diamond calls global warming a pre-eminent example of a ‘slow trend concealed by wide up and down fluctuations’ (2005: 425). He likens the denial of climate change impacts by leading politicians, including former US president George W. Bush (and his contemporary John Howard in Australia), in the late 1990s and early 2000s to the elite of ‘the medieval Greenlanders [who] had similar difficulties recognizing that their climate was gradually becoming colder, and the Maya and Anasazi (in Central and North America) [who] had trouble discerning that theirs was becoming drier’ (2005: 425). – link

We evolved to react to imminent dangers, not slow-rolling and seemingly invisible catastrophes as an unintended consequence of our cushy lifestyle. From lofty corporate boardrooms to the filthy streets of skid row, the mass of humanity is following the same biological script of overshoot and collapse seen in every organism from bacteria to reindeer herds. Fossil fuels only enabled the destruction to multiply a million-fold, culminating in one final and spectacular explosion of human activity that will leave the planet nearly barren for eons.

Open-ended growth appears to be inherent in nature, all the way from the DNA to the arthropods to mammals, including humans. Open-ended growth is the psychology of a cancer cell. I am not sure I know of a species which has learnt how to limit its own growth. Unfortunately species which transcend their environmental resources can hardly survive – the final arbiter of the climate impasse will be nature itself. ~ Andrew Glikson, Earth and paleo-climate scientist, Australian National University

The beauty and wonder of this planet is being trashed by a naked ape whose cleverness in tool-building has far outstripped his ability to handle it in any restrained or judicious manner. Nature’s rich book of life is being pancaked into a cheap, crumpled comic book.

Add in the development of mass consumerism, planned obsolescence, and the hypnosis of corporate-sponsored TV and you have a passive, malleable population happily marching towards the slaughterhouse. It’s fitting, then, that the masses would be swindled by a megalomaniac bankruptcy artist who dabbled in Reality TV.

Every one of Trump’s cabinet picks is a big middle finger in the faces of those who fell for his pseudo-populist rhetoric: billionaires, Wall Street sharks , Goldman Sachs alumni , and hard core laissez-faire capitalists chomping at the bit to deregulate, monetize, and privatize every last bit of what remains.

The allure of capitalism has always been that you’re just one lucky break away from becoming one of those fat cats, if only someone would give you a chance. A prescient observation by Ugo Bardi from earlier this year:

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Trump is a symptom of the ongoing breakdown of the social pact…capitalizing on this breakdown by…playing on the attempt of the white (former) middle class to maintain at least some of its previous prosperity and privileges. Trump is…an unavoidable consequence of resource depletion. – Link

The bottom line is that a swing towards authoritarianism happens when resources become scarce.

Climate change is simply a symptom of humans overshooting the planet’s carrying capacity. Free market ideologues🦀 🦕 🦖 🐉are nearly always climate ‘skeptics’ because acknowledging the reality of human-induced climate change would be an admission that industry must be curtailed or controlled. Left-leaning people nearly always accept the science because it goes along with their criticisms of capitalism which externalizes social and environmental costs for the benefit of just a few at the top of the economic hierarchy. Thus we see parasitic Trump 🦀 surrounding himself with right-wing, climate denying, fossil fuel corporatists and insiders who will be doing everything in their power to dismantle health and environmental regulations including privatizing social services which are barriers to capitalist expansion.

To be blunt, our chance of developing a sustainable culture passed us by a long time ago. People will try to adapt until they cannot, and myths will be created to explain away harsh realities. A dystopic future in all its horrific glory has arrived: baked-in biospheric collapse, the inherent and irreconcilable contradictions of techno-capitalism, a dysfunctional political system unable to come to terms with root causes, and the cognitive dissonance of the masses blind to the bigger picture.

Trump's infrastructure privatization plan is a hat trick that optimistically turns $200 billion into $1.5 trillion, is designed to eliminate the public sector and to bankrupt cities and states, says economist Michael Hudson.

The current average price-to-earnings ratio of stocks is still far above the historic average, so we should not be surprised that there is a stock bubble and that it burst, explains PERI economist Robert Pollin.

It is the nature of organized investment markets, under the influence of purchasers largely ignorant of what they are buying and speculators who are more concerned with forecasting the next shift of market sentiment than with a reasonable estimate of future yield of capital - assets, that, when disillusion falls upon an over-optimistic and over-bought market, it should fall with sudden and catastrophic force. - JM Keynes

James Montier: This Is A "Greater Fool Bubble" And I'm Getting Out

by Tyler Durden

Tue, 02/13/2018 - 16:53

SNIPPET:

How does one explain the existence of this particular "greedy bear"? To Montier 🦋 the cognitive dissonance noted above is a function of the Fed-reflated bubble the US finds itself in: the near rational - or cynical - bubble, also known as the greater fool bubble. Here's Montier:

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I am not a great fan of this nomenclature as it suggests a veneer of respectability that I find undeserved. To me these are really better described as greater fool markets. They are cynical bubbles in that those 🦖 buying the asset in question don’t really believe they are buying at fair price (or intrinsic value), but rather are buying because they 🦖 want to sell to someone else 🐵 at an even higher price before the bubble bursts. Chuck Prince 🦀, the former CEO of Citibank, aptly demonstrated the typical cynical bubble mentality when in July of 2007 he uttered those fateful words, “As long as the music is playing, you’ve got to get up and dance. We are still dancing.”

Economist and President of the Institute for the Study of Long Term Economic Trends, Michael Hudson joins the program today to warn us that the stock market isn't the economy, the economy is in much worse shape than the Stock Market!